Air India, Case study, crisis, pilot strike, case study, industrial relation, swati luthra, labor dispute, labor law

1. Presented by-
MEENAL SANTANI (039)
SWATI LUTHRA (054)

2. Air India is the flag carrier airline of India. It is part of the Government of
India owned Air India Limited (AIL). The airline operates a fleet of Airbus and
Boeing aircraft serving Asia, Europe and North America.
Its corporate office is located at the Air India Building at Nariman Point in
South Mumbai.
Two major domestic hubs at Indira Gandhi International Airport and
Chhatrapati Shivaji International Airport.
International hub at Dubai International Airport is currently being planned.

3.  Founded by JRD TATA in 1932.
 1953 Indian Govt. acquired major stake.
 Renamed to Air India Ltd. In 1996.
 In 2006 the airlines began showing signs of financial distress.
 In 2007 Air India and Indian Airlines senselessly merged along
with their subsidiaries to form Air India Limited.
 Already reeling under financial crunch because of the 10 day pilot
strike, Air India finds itself in a tight spot as State-run oil refuse
to supply the fuel to the bleeding carrier.

4.  Combined losses for Air India and Indian Airlines were 770
crores (7.7 billion).
 After the merger of the airlines, this went up to 7,200 crores
(72 billion).
 Air India has accumulated a debt of Rs. 42,570 crores
(approximately $10 billion) and an operating loss of Rs. 22,000
crores, and is seeking Rs. 42,920 crores from the government.
 Due to high fuel and loan costs, Indian government has already
pumped 32 billion rupees into Air India since April 2009 and
then government bailed out Air India Ltd.
 The carrier invited offers from banks to raise up $ 800 million
via external commercial borrowing and bridge financing. This
was stated in the documents put up on the carrier's website.

5.  1) About 100 pilots went on medical leave as a
mark of protest while their talks with the
management were still on.
 2) The reason the pilot members of IPG went on
mass sick leave, protesting the move to provide
Boeing-787 Dreamliner training to pilots from
the erstwhile Indian Airlines.
 3) Later, the same day it sacked ten agitating
pilots and de-recognized their union after 160
pilots failed to join duty by the given deadline.
 4) After putting forth an original list of 14
demands, the aviators are now asking for
reinstatement of their 101 sacked colleagues.

6.  The pilots have been on strike for more than
50 days, making it the longest running pilots'
strike in the last 40 years.
 UNIONS VIEW:
 The derecognized unions released a press
note saying that the strike is the longest strike
in the last 40 years.
 The airline, then, started dialogue with the
pilots on strike and they were back to work in
a week. "This means that if the airline wants,
it can open dialogue with the pilots. The idea
is to resolve differences, improve working
conditions and service more passengers," an
airline official said.

7.  Union civil aviation minister Ajit Singh
appealed the pilots to resume work
 The government has already given a
package of Rs 30,000 crores for the
revival of Air India. But, money alone
cannot solve the problem.
 The government will not adopt a
victimization policy, and whatever
problems they have will be sorted out in
three months, he said.
 "No recruitment action has been
initiated by the Air India management.
Air India has also prepared a Voluntary
Retirement Scheme for its employees,"
Singh said.

8.  MANAGEMENT’S VIEW
 “If passengers are unhappy, it would create more
problems in days to come. If the airline does not
survive, then there is no meaning of other things like
salary, promotion or increment.”
 PILOTS' STRIKE: AIR INDIA LOSES Rs 500CR,
EXTENDS CONTINGENCY PLAN TILL JULY
 Losses of about Rs10 crore per day
 Under the interim schedule, Air India would operate
38 international flights per day instead of 45 that it
operates under normal conditions.

10.  QUES 1: Has the management been insensitive to pilots’
concerns, forcing them into unreasonable behavior?
No demand, no matter how genuine, can justify a strike in today’s
situation. Successive managements have also been insensitive to
issues raised by the unions. This is because of a weak HR setup,
lack of structured policies and their inconsistent application.
 QUES 2:The root cause of much of the strife in AI seems to be
the merger (of Indian Airlines and Air India) that led to the
formation of a unified carrier. Can the two sets of employees
think of themselves as one unit?
ANS: Merger is undoubtedly at the root of the current problems.

11.  Political interference involved in running of this
government-backed carrier.
 The first batch of pilots were sent by the airline
management to Singapore for B787 training.
 When the 32 pilots are back after completing their B787
training, the airline management has asked them to do a
refresher course and go back to flying A320 aircraft, which
is the one they flew before they were sent for the
Dreamliner training.
 “Had they reached an agreement with the AI pilots on their
career progression issue before sending the pilots for
training the strike would not have happened,'' said an
airline top official.

12.  Air India crisis has shocked the whole nation .Pilots refusing
to fly while Management refusing to talks has disturbed the
air traffic of India so much that people are now relying on
Trains for any Business Class Travel needs.
 Air India is at war, with itself.
 In 2007, the government had merged Air India (AI) and
Indian Airlines (IA) to make one of the largest airlines in the
world by fleet-size and manpower. Five years down the
road, it has come not to be.
 Insiders today say that though they sit in the same offices
and share a common brand name, the split is wide open, as
two systems compete to run one airline.
 Not just pilots and the cabin crew, even managers and
junior staff from both sides fight over allowances, pay
scales and even holidays.

13.  “The merger created problems that cannot be solved. Our
grades, work, promotions and allowances are different.
When you see your colleague from the other cadre doing
the same work, but getting easy promotions, allowances,
there is bound to be resentment,” a senior official with the
operations arm told this correspondent on condition of
anonymity.
 “The company below the rank of DGM (deputy general
manger) is not at all integrated. There are two systems of
promotions, allowances and even foreign postings.”
 Differentiation in income and allowances between AI and IA
pilots.
 Issue of promotion.

14. Legal proceedings involved in the end of the strike
 The 58-day protracted strike by Air India pilots was called off
on 4th July after the Delhi high court asked them to join
duty within 48 hours and the management to
sympathetically consider their grievances.
 The decision to end the strike was announced by the Indian
Pilots' Guild (IPG) after a meeting of its managing
committee in Mumbai.
 In the late night statement, the IPG thanked the Indian
judiciary, especially the Delhi high court, "for mediating in
this issue, which is critical to the survival of Air India and is
in the national interest".

15.  The IPG statement came after its counsel, Geeta Luthra,
told the high court that the striking pilots numbering 434
will join their duties in 48 hours by giving joining reports.
 "The AI management shall sympathetically consider the
grievances of the pilots including the aspect of
reinstatement of those pilots whose services were
terminated as a consequence to their strike," Justice
Khetrapal said.
 Earlier, the IPG welcomed the high court's order. "The court
has made very positive observations. It has said that all
pilots should be taken back and no distinction should be
made between those sacked and others. We are happy
with the court's observations," IPG joint secretary Tauseef
Mukadamn said.

16.  Root of the problem is with the untimely and
misjudged merger of the two airlines.
 Measures have to be taken up so as to conclude the
misunderstandings between the management and
the unions.
 If this is not feasible then it is time that the Airlines
split from their troublesome merger as suggested by
industry experts so as to the root problem will be
hence solved.

17.  www.timesofindia.com
 www.economictimes.com
 www.ndtv.com
 www.airindia.com
 www.Aviation-safety.net
 www.cbn.in
 www.outlook.in
 www.Financialexpress.com